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Get What You Pay For

It's not the institution itself that's troublesome; to the contrary, stocks have become wonderful wealth creators for me. But that's also part of the problem. I learned to invest on my own -- in spite of a slew of messages that said I couldn't. My favorite is the TV ad that shows a patient on the phone with a doctor, who is giving him instructions for how to perform surgery on himself. The pitch closes with the patient's simple refrain, "shouldn't you be doing this?"

Your broker isn't a doctorOf course he should. Medicine is startlingly different from investing. You don't need decades of expert training in order to make sound investing judgments. And you're very unlikely to kill anyone by pressing the "buy" button at the wrong time.

Nevertheless, several of you believe that professional money managers are worth paying for. And that includes a member of my own family. I'll spare you the details of that story.

Just know that advisors are scrambling to find new ways to get at your hard-earned moola. Their latest lure? Unified Managed Accounts, or UMAs.

Under the hood with UMAIt's an intriguing idea. In short, a UMA is an all-in-one portfolio managed by an advisor according to your stated desires for diversification and tax efficiency. Any investing vehicle is game: mutual funds, exchange-traded funds, bonds, hedge funds ... it can all be had in a UMA.

But that flexibility comes at a price. UMAs are typically out of the reach of anyone with less than $250,000 to invest. Still, that could be called cheap. How? Consider hedge funds. Investors worth less than $1 million are very likely to receive a chilly reception when approaching these higher-risk options on their own. Yet Financial-Planning.com says that the average UMA investor has just $600,000 in assets.

Another advantage to these accounts is paperwork. All assets are tracked in one statement that provides performance data; there's never any confusion about what you have and what it's worth. No wonder Financial-Planning.com reports a boom in UMAs.

Get what you pay forBut are they really worth the price? Bank of America (NYSE: BAC) recently began rolling out UMA accounts that could cost as much as 2% annually in management fees. That's hardly surprising: Financial-Planning.com reports that setting up the technology to manage a UMA is remarkably costly.

Worse, high fees are no guarantee of outsized performance. Once again, consider hedge funds, which, through October, had returned just 9.2% this year. That was nearly three full points less than the S&P 500 over the same period.

Follow the moneyShould any of this automatically dissuade you from investing in a UMA? No, of course not. But it's worth asking if increased efficiency -- tax and otherwise -- comes at the cost of market-beating performance, after all fees are considered. If not, then, at least in this Fool's view, there's no point to consolidating.

So before you buy, check the advisor's performance history on managed accounts. Make sure fees are included and benchmark the results versus the S&P 500. And ask that all fees be spelled out. You'll want to know what you're being charged for, why, and how those charges will be accounted for in your portfolio. Think of the process as checking under the hood of a used car. You don't want to drive away with a lemon, and you don't want to invest with Grayson-Moorehead.

Have other money tips? Tell me. I'm writing new articles on personal finance and investing basics every week as part of our new money management service, Motley Fool GreenLight. It's tailor-made for Fools like you who aim to take control of their financial destiny. Click here to learn more.

Fool contributorTim Beyers, ranked 873 out of 14,822 inMotley Fool CAPS, is more fond of Uma Thurman than UMAs. Tim didn't own shares in any of the companies mentioned in this story at the time of publication. Get a peek at everything he's invested in by checking Tim's Foolprofile. Bank of America is an Income Investor pick. The Motley Fool'sdisclosure policyis worth every penny.

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Tim Beyers first began writing for the Fool in 2003. Today, he's an analyst for Motley Fool Rule Breakers and Motley Fool Supernova. At Fool.com, he covers disruptive ideas in technology and entertainment, though you'll most often find him writing and talking about the business of comics. Find him online at timbeyers.me or send email to tbeyers@fool.com. For more insights, follow Tim on Google+ and Twitter.